International Exchange of Information Manual

Country-by-Country reporting: Master and Local files

The UK rules use many terms and definitions that are taken from the OECD guidance and that guidance should be checked when completing a CbC report.

The Action 13 report details a standardised approach for transfer pricing documentation, these being the master file and local file, as well as the Country-by-Country report. The master file contains a high level overview of the group’s global business operations and transfer pricing policies; the local file provides detailed transactional transfer pricing documentation for a specific jurisdiction identifying material related party transactions, the amounts involved in those transactions and the company’s transfer analysis of those transactions.

HMRC requires that transfer pricing documentation should be retained to support the arms-length pricing. Such documentation should be proportionate to the size and complexity of the transactions or business involved and should be the same as that specified in Annexes I and II of the Action 13 report. HMRC does not require a master file or local file to be filed with the CbC return.

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